The Online Experiments That Could Help Newspapers

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In a week, the site will roll out additional features allowing publishers to restrict assignments to writers based in a specific geographic location or accredited by a certain professional organization. Helium's top writer made $5,000 last year.

Specialized E-Readers

The arrival of specialized e-readers for scanning newspaper and magazine pages could shave printing and postage costs while helping to capture more advertising dollars. In the second quarter, The New York Times is planning to release an updated version of its Times Reader software, which will allow for an e-reader-like experience on many netbooks and mobile Internet devices. Meanwhile, expected to enter trials in the second half of 2009, an e-reader from Plastic Logic features a large, 8.5 x 11-inch screen, designed to allow newspaper publishers to display their custom layouts and ads (Amazon's (AMZN) Kindle e-reader doesn't support advertising). Because such specialized newspaper e-readers will require users to "turn" digital pages instead of scrolling through them, the users will be able to see all the ads on the page. So advertisers may pay higher rates for e-reader ads than for Web site ads, figures Robert Larson, vice-president for digital production at NYTimes.com.

Plastic Logic already has distribution deals with the Financial Times and USA Today, which will be offered on a subscription basis. Plastic Logic's investors, which include Oak Investment Partners and Dow Venture Capital, have already poured more than $200 million into the project. And Hearst is rumored to have developed its own magazine e-reader as well; the company declined to comment on the issue.

Will all these efforts succeed in resuscitating the industry? Not necessarily. They may simply be a sign of the rising threat for American newspapers. "The downturn in revenues has been so deep, there's a certain desperation in the media world," says Ken Doctor, affiliate analyst at publishing researcher Outsell. "It's pushing people in odd directions."

Kharif is a senior writer for BusinessWeek.com in Portland, Ore.